Missouri’s new minimum wage law will be… complicated

Jazz ShawPosted at 11:01 am on August 27, 2017

Generally when we see news of a new minimum wage law it relates to a city or state raising it. Missouri went in the opposite direction recently, instituting a rule which forbids any local government entities from instituting a minimum wage which is higher than that state minimum. (Currently sitting at $7.70 per hour.) That’s going to cause considerable consternation for people in St. Louis who only recently received a raise to $10.00 per hour because of a municipal law. (Associated Press)

Thousands of workers in St. Louis will likely see smaller paychecks starting Monday, when a new Missouri law takes effect barring local government from enacting minimum wages different than the state minimum.

The law is drawing protests in St. Louis and in Kansas City, where a recent vote approving a higher minimum wage is essentially nullified without ever really taking effect.

The impact is direct in St. Louis, where the minimum wage had increased to $10 after the Missouri Supreme Court sided with the city in a two-year legal battle. Days after the Supreme Court ruling, Missouri’s Republican-led Legislature passed a statewide uniform minimum wage requirement. The state minimum wage is $7.70 per hour. Republican Gov. Eric Greitens declined to veto the bill, allowing it to become law.

This new law seems to be somewhat unique in that it effectively also sets a maximum minimum wage rather than just a minimum. I was glancing through the summaries of minimum wage laws around the country and couldn’t find anyplace else which has tried this. So is it a good idea? Keep in mind that the law obviously doesn’t forbid anyone from paying a higher rate if they wish, and in fact a number of businesses (mostly smaller ones) have signed on to a pledge to stick to the new, higher rate of ten dollars.

I suppose one could approach this from the supremacy angle and say that the state has the right to determine such rules for all the counties and municipalities if they wish. After all, the federal minimum wage overrides any states which attempt to have a lower rate as the minimum, so the supremacy aspect should flow downhill from there.

But the idea seems problematic. It might be a way for a more conservative state government to stick a thumb in the eye of more liberal cities who are in line with the Fight for 15 crowd, but the net effect seems negative. One of the major hurdles to a national minimum wage hike is the fact that the cost of living can vary so wildly between large, urban areas and more rural districts. New York has had to look at such accommodations because the average rent in the Big Apple can literally be ten times higher than in some rural, upstate regions.

A city can get carried away (see Seattle for an example) and jack up their minimum wage to the point where it shuts down businesses and costs jobs, but it’s understandable if some of them want to take the average cost of living into account. Will this be challenged in court by the City of St. Louis? Can it even be challenged? Interesting questions and I’m sure the rest of the country will be watching how this one plays out because the minimum wage is a hot topic pretty much everywhere these days.

UPDATE: (Jazz) I almost immediately received feedback on this subject. Turns out it has been done before in at least a few states. Alabama already passed such a law and it stood up to at least one challenge.